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It’s not a case of all or none

World Coal,

Greg Lane

Let’s face it. Coal is on the nose.

Coal has gone from being one of the popular kids in school during the massive boom, to being the kid who is bullied from even those who were once buddies.

It’s been somewhat of a perfect storm. From record prices and massive demand to an oversupply and market glut. Share prices and job numbers reflect the dive in coal’s popularity – and let’s not mention the treasury coffers.

Politicians were once big fans, with the largesse from the boom padding those coffers and pumping up royalties – plus the added bonus of winning over the voter with the likes of juicy tax cuts, new roads, schools and hospitals, to name a few.

But it would seem even some of our closest buddies are turning their noses up at coal in preference to sexy renewables. After all, who wouldn’t love a shiny new solar panel sitting atop their roof? It’s fashionable, it’s subsidised, it’s relatively cheap and you can say you’ve ditched coal. After all, no-one would publicly admit that they were buddies with coal anymore, would they? They fear that, if they did, the schoolyard bullies could turn their attention to them.

And those bullies come in the form of the taxpayer-funded anti-coal activists.

We don’t hear the environmental activists chanting or brandishing placards with slogans ‘no copper’, ‘no aluminium’, ‘no gold’; however, we see and hear the loud-and-clear roar against coal.

The broad argument dished out by the activists is that, in the future, it’s a case of fossil fuels or renewables. Their narrative touts the suggestion that we can flip the switch and turn off fossil fuels, then turn on renewables: a case of all or none. While most of us know that’s just not possible, there are many who are jumping on that noisy bandwagon. And little do they acknowledge – or realise – that the bandwagon is made from coal.

The activists forget, ignore or don’t even realise that metallurgical coal and iron ore is required to make the steel for many bandwagons: cars, buses, trains, ferries, bikes and so on. An average refrigerator requires 70 kg of steel. Every solar frame is made from some steel. Every 1 MW of wind turbine capacity requires 220 t of coal – or the equivalent of 220 small cars – while the foundation is made from concrete, which is made using products of coal.

One of the main uses of thermal coal is in electricity generation. The activists screech to all who will listen that the tap to this cheap and reliable fuel source can be turned off. Regardless of their rhetoric, the International Energy Agency (IEA) has forecast that the demand for coal is set to increase as Asia’s demands grow in its bid to alleviate poverty and a life of darkness.

While the western world – including green activists – enjoy the luxuries of flicking on a switch to light homes and offices, heating food on an electric or gas stove or simply having a hot shower every morning, there are 1.3 billion who don’t. Therefore, by 2040, Asia is projected to account for four out of every five tonnes of coal consumed globally to meet the demand and help fill the void. In Southeast Asia, the share of coal in electricity generation is forecast to rise from 32% to 50%.

And Queensland is in pole position to feed that demand over the coming decades. It’s simple: our coal contains a higher energy value at 6100 kcal/kg and produces lower emissions than that of some of our market competitors. One tonne of our thermal coal can produce as much energy as 1.5 t of Indian coal, which sits at 3500 kcal/kg: replacing Indian coal with Australian coal therefore produces roughly one third less emissions. The coal produced by our Indonesian neighbours, which measures 5130 kcal/kg, also burns less efficiently due to, in part, its high moisture content.

Queensland coal is the perfect choice to help reduce global emissions. It is also a better fuel supply for the new generation of high-efficiency lower-emission (HELE) power plants being built. The IEA report also notes that based on the strong demand for coal in Southeast Asia, there is significant opportunity for greater investment in highly-efficient power plants that have the ability to reduce emissions by up to 40%. There are already 670 HELE generation units operating across wider Asia and about 1000 more on the drawing board.

So despite the current bullying war that is being waged by the anti-coal activists, the outlook for coal is not diminishing. It’s time for people to understand that coal’s future is not dead; it’s time to buddy up and accept that future global energy needs will be met using a mix of different fuels feeding in through different mechanisms. The answer is not ‘all or none’ as some would have the public and the policy makers believe. The answer is that, long into the future, fossil fuels will provide a crucial and significant role in the energy mix. It’s not a case of fossil fuels OR renewables – it’s a case of fossil fuels AND renewables.

Note: This article first appeared in the May 2016 issue of World Coal.

About the author: Greg Lane is Acting Chief Executive of the Queensland Resources Council.

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